Departing PARC CEO looks back wistfully on blue skies of the past

The outgoing head of PARC, famed for developing Ethernet and the GUI, talks to …

PARC, which started out as Xerox's Palo Alto Research Center, is rightly famous for its role in the development of far-reaching technology like Ethernet, the laser printer, and the graphical user interface. But, as with some of the great industrial labs of an earlier era, PARC has slipped out of the public view, even as it was spun out from Xerox as an independent entity. But PARC is still around, and recently celebrated its 40th birthday. We had the chance to chat with its CEO, Mark Bernstein, shortly before he announced his departure. Bernstein described how PARC has evolved over the years, and talked a bit about the end of the blue sky research labs that US companies used to support.

The birth of the semiconductor industry in California played a key role in the formation of PARC. "PARC was founded at the other end of the country from Xerox corporation with the intention to understand how the technologies that were taking shape here in silicon valley at that time... how those would influence how people worked," Bernstein said. In the '70s, he said, that mostly focused on distributed computing environments, but as office computers became commonplace, the focus shifted to ubiquitous computing.

Bernstein noted that we're still partly into the era expected by the first research on ubiquitous computing: "Computation was going to proliferate, and migrate into the environment in many forms, and it would be there to help people accomplish things in their work and play. Part of that vision has clearly come to pass. We have many—some would argue too many—devices that require a lot of our attention to accommodate and integrate into our lives. The other part of that vision, that they'd be an invisible support system for how we live our lives, hasn't come to pass."

PARC goes independent (and commercial)

Although many of the computing problems are the same, PARC isn't; in 2002, Xerox made it an independent company. PARC still gets a bit less than half of its revenue from Xerox, and still does some of the activities traditionally associated with it, such as development of enterprise tools. But some of this work is no longer done for Xerox, since PARC is now free to do contract work for other companies. And PARC now takes some of its developments straight to market by acting as a startup incubator. "If you look at the startups we've done in the past," Bernstein told Ars, "they've typically been internal projects that weren't aligned with Xerox or weren't aligned with the core business, or a direct match to a perceived or emerging market need."

Many recent efforts have involved areas that are traditional staples of PARC, like the ability to do semantic searches on e-mail archives and another startup that focuses on wireless security. But computing is just one area that PARC has focused on. In recent years, its work in materials science has gotten it into areas like amorphous silicon and active matrix materials for large-screen displays. Just over five years ago, PARC got into clean tech. A startup based on concentrated solar technology is now up to 60 people, and the military is looking to foster PARC technology that allows low-energy desalinization.

All these new activities reflect a shift from PARC's earlier, blue-sky approach to research, where developing technology that could be pushed to market was often irrelevant to the understanding of where the technology might go. But that's part of a large set of changes that have occurred at PARC.

The one thing that hasn't changed is its research focus. PARC houses nearly 200 full-time researchers, two-thirds of whom have PhDs, most of those in physics and the life sciences. The Center has agreements with places like Stanford and Berkeley in which the staff can have joint academic appointments. But there's a difference in focus between PARC and a typical research university. "We look to have research scientists who are charged with identifying key, emerging, important science problems in the world that have a commercial consequence to their solution," Bernstein said. "Its a passion of our researchers to see their work in the world."

To help them get the work into the world, PARC also has a full-time business development team that consults with the researchers. Their job is to help ensure that the project's concept can result in new technology, and to identify when that tech is mature enough that it can be licensed to other companies or built into a product.

Despite the heavy emphasis on commercialization, the researchers are supported by a mix of funding. Some comes directly from Xerox, but PARC also provides technology services and licenses some of its patents. And it receives significant federal research funding through agencies like DARPA, the Department of Energy, and the National Institutes of Health. Many of the employees have joint appointments at nearby academic institutions like Berkeley and Stanford.

The changing research landscape

The focus on being able to make money through licensing fees, products, and startup companies will definitely shape the sort of research that's performed at a place like PARC. Not all of that is negative; Xerox killed work on networking technology a while back (presumably because it wasn't strategic to the company), but Bernstein said that work has been resuscitated since the center went independent. Still, it's a far cry from some of the large private research labs in the past, which could let people take time out from commercial projects to let them do things like win a Nobel Prize for discovering the cosmic microwave background.

That difference weighted heavily on Bernstein's mind, perhaps because he was already planning to leave PARC. He identified two trends that helped bring the great labs to an end and slow down the US' innovation economy. The first is the end of the large monopolies, either government-sanctioned (like AT&T) or de-facto (like IBM). Without that kind of security, the ability to invest in undirected research is hard to justify; he noted that Microsoft Research still does interesting work, but it's generally focused on problems within the company's domain. That change has been paired, in Bernstein's opinion, with a growing conservatism in venture capital, as more of the money invested in it has come from institutional investors that include retirement funds and nonprofit endowments.

Combined, these trends are cutting back on the private investment in innovative research. "It's a key part of what the US needs to reclaim in some way, shape, or form—the innovation space," Bernstein said, in referencing the report Rising Above the Gathering Storm, which laid out the threats posed by a lack of technology development in the US.

Bernstein also agreed with one of the report's conclusions: the big research labs are not going to come back, and the Department of Energy's national labs system is the only thing that could provide the equivalent anytime soon. "The repurposing of the national labs system to something other than high-energy physics and nuclear weapons is long overdue." he told Ars.

He ended on a note of optimism, focusing on the efforts of Energy Secretary Steven Chu (formerly the head of the nearby Lawrence Berkeley Labs) to direct these labs and the Department's stimulus money into technology development, including blue-sky work funded by an advanced projects (ARPA-E) group. "I'd like to see what happened in 2009—that the government rethinks... how scientific funding is allocated," Bernstein said, "and they look more towards what the Obama administration seems to be focused on, to invest in the potential collaboration between academia, industry, and the government to build new industries, to create jobs."

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